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Policy dead-end: Central Banks’ continued use of DSGE Models

Policy dead-end: Central Banks’ continued use of DSGE Models
André Breedt

André Breedt

Policy Researcher at Politheor: European Policy Network
André is currently pursuing a PhD in economics at the Sorbonne in Paris. His research centres around the development of econophysics for economic analysis, and applied use in financial markets. He completed Masters of Philosophy and Science, both in economics, also from the Sorbonne. He has previously worked, amongst others, at the United Nations and Deutsche Bank, and holds an undergraduate degree in law from the University of Pretoria in South Africa.
André Breedt
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The DSGE model has been the workhorse of central banks since the early 1980’s and has suffered from abundant and scathing critique: Olivier Blanchard argues that DSGE models are “seriously flawed” and Paul Romer – a doyen of the neo-classical economic fraternity – accuses these macroeconomic models of “attribute[ing] fluctuations in aggregate variables to imaginary […]

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